We think we should be issuing a warning regarding a potential clear and present danger regarding insurance provision for asset repossession. There is potentially a huge black hole to be filled.
We have received many applications from repossession professionals and agents of various size and scale for inclusion within the IBEAMTM open market collaboration platform.
A number of applicants claimed to be conducting repossession activities on behalf of the asset finance community as a point of reference, but were completely unable to produce or provide evidence of even the most basic road risk policy, let alone any policy that covered their repossession activities and are protective of their clients.
Whether these applicants were embellishing their previous achievements, or whether they had been insured through some higher order, perhaps by their instructing lender is not clear.
What is perfectly clear is that there are companies and individuals willing to take on work in this sector without being adequately insured. Which means that it is quite likely that work is currently being carried out without adequate insurance.
This is a great big RED FLAG and should trigger an immediate review of insurance provision.
Remember, with the extent of multiple sub contracting that occurs in this business you will need to ensure that the individual in the field carrying out the instruction is actually insured.
We think that this situation is so important that we have commenced a dialogue with insurance providers in this sector. We wish to discover from them the penetration of policies written and compare that with the number of known practitioners.
There are of course other reasons why we are engaging in this dialogue with the insurance sector, the main one being related to cost of repossession related insurance.
With single operator insurance premiums costing sometimes several thousands of pounds, this can represent at least one month of annual revenue or more to the repossession service provider. That is to say the provider may have to work up to a month or more just to pay for adequate insurance.
This provides a significant barrier to entry and a potential risk that providers will operate without it.
The premiums are high for several reasons, some of which are, high risk business activity, minimum and entry premium levelling, and lack of visibility as to the actual risk undertaking.
The IBEAMTM open market collaboration platform provides compliance confirmations as to its service provider’s insurance adequacy.
It provides the insurer with full visibility of the risk undertaken, and combining this visibility with risk mitigation routines like the introduction of driving risk assessments and training to the sector should all serve to improve the risk appetite of insurers, giving them the confidence they require to properly engage in the sector and establish fairer actual risk informed policies.
This activity should remove barriers to entry and introduce fairer and greater competition.
WE THINK, YOU WINTM
